Inner ear hair cell loss and lack of hair cell regeneration are the major cause of permanent hearing loss. In this application, it is proposed to test whether mouse embryonic stem cell-generated hair cell- like cells are functional in the sense that they display mechanotranduction currents, appropriate basolateral currents, as well as the ability to form appropriate synaptic connections. It is further planned to develop an in utero cell-replacement treatment to determine correlation between occurrence of graft-derived hair cells and regionalized restoration of the organ of Corti. Physiologically, we expect that such a restoration may lead to alleviation of hair cell loss and hearing impairment in a mouse model. A second Aim addresses the guidance of embryonic stem cells toward hair cell-like cells. It is proposed to devise a protocol of defined inductive steps, which will enable researchers to efficiently generate progenitor cells from embryonic stem cells that are competent to develop along the otic lineage. A third Aim proposes to identify a non-FGF-based activity that is involved in otic induction, which is released from a region of the chicken embryo that is adjacent to the otic placode. PUBLIC HEALTH RELEVANCE Toward finding a treatment for hearing loss, it is proposed to continue research on converting mouse embryonic stem cells into hair cells. First, it is planned to assess whether stem cell-generated hair cell-like cells display the same functional properties as wild type hair cells, particularly cochlear hair cells. Building on this, it is planned to use embryonic stem cell-derived inner ear progenitor cells to treat a mouse model of hereditary deafness and to test whether hearing loss can be alleviated with a cellular treatment. In a parallel Aim, it is proposed to increase the efficacy by which embryonic stem cells can be primed to become responsive to inner ear inducing signals. This will be done by mimicking the inductive steps that lead to establishment of the inner ear during embryonic development. In the third Aim, it is planned to identify a signaling molecule from chicken embryonic tissue that appears to be conducting such a priming, which makes progenitor or stem cells responsive to FGF-based inner ear inducing activity.